Shipping industry news sources report that as the rainy season approaches, the pace of demolition operations in India and other major shipbreaking markets has slowed.
Leading ship acquisition company Best Oasis stated in its latest weekly report: “The Indian market remained sluggish this week, with transaction volumes for all ship types continuing to decline, demolition quotes falling across the board, and overall market sentiment weak. Short-term market prospects are not optimistic; the arrival of the rainy season will further drag down shipyard operational efficiency. This seasonal factor has historically significantly reduced demolition transaction volumes during the same period. The continuous escalation of geopolitical conflicts in key shipping lanes has increased market uncertainty, which may affect the supply of vessels destined for demolition in the South Asian subcontinent and transaction volumes. The competitiveness of Indian demolition quotes continues to decline, and market share risks being squeezed by Pakistan. If the current market environment remains unchanged, this trend may continue.”
Best Oasis analyzed the Bangladesh market: “The core focus of the market this week is the national budget report for fiscal years 2026 to 2027. Industry practitioners are scrutinizing policy details line by line, assessing the impact of new regulations on the shipbreaking business. Preliminary information indicates that import tariffs will increase by 300 taka (approximately 2.4 US dollars). The industry is still continuously calculating the subsequent chain effects.”
Despite the uncertainty in budget policy, sentiment in the Chittagong market remains positive. Local shipbreakers are still actively acquiring vessels for demolition at competitive prices. The Pakistani shipbreaking market is firm, with strong demand across all ship types and stable demolition quotes. All shipbreaking companies are actively acquiring vessels, and market acquisition willingness is strong. Affected by the ongoing conflict with Iran, the supply of domestic steel plates and scrap steel sources is hindered, tightening steel supply. The Turkish market is generally stable with a slight weakening; recent transactions are light, and quotes have shown no significant fluctuations for several consecutive weeks. Buyers are only focusing on large vessels, with almost no interest in small ones. European shipbreaking yard capacity is near saturation, supporting stable regional demolition quotes. Compared to the South Asian subcontinent, Turkish quotes have long been at a disadvantage. Without special regulations or strict environmental requirements, shipowners prefer to send vessels to South Asia for demolition.”
Meanwhile, shipbroker Intermodal noted in another report: “Affected by the upcoming rainy season in the Indian subcontinent, sentiment in major shipbreaking hubs in South Asia is turning cautious. The rainy season climate will disrupt shipyard operations and reduce efficiency. Market participants are also closely monitoring developments in the Middle East situation. If a peace agreement is reached and trade flows return to normal, it could reverse the current sluggish market. South Asian countries are highly dependent on Gulf energy exports; lower energy prices can ease economic pressures in these countries. Falling fuel costs and narrowing geopolitical risk premiums leading to lower freight rates may indirectly boost shipbreaking demand. The Indian market remains quiet, and transactions may shrink further during the rainy season. The domestic steel market fundamentals are weak, with sluggish demand and falling steel prices continuing to compress steel mill profit margins.”
At the macro level, the Indian government has introduced a daily diesel purchase quota policy to alleviate energy supply pressure and control import spending. However, if a peace agreement is reached in the Middle East and shipping through the Strait of Hormuz resumes smoothly, India will benefit significantly: lower energy prices can substantially reduce external cost burdens.
The Chittagong market in Bangladesh performed well this week. Even during the rainy season, there is sufficient supply of vessels for demolition, and the acquisition enthusiasm of breakers remains high. Tight liquidity in the steel market continues to suppress market confidence, but steel plate prices remain stable for now. The latest national budget proposal includes a 19% increase in public fiscal spending, which is expected to boost overall demand and inject positive momentum into the economy.
Within the South Asian region, the Pakistani shipbreaking market shows stronger overall resilience: competitive demolition quotes, stable rupee exchange rate resilience, and a relatively low supply of vessels for demolition are multiple factors supporting the market. However, sluggish steel demand and conservative procurement by steel mills continue to limit overall demolition transaction volumes. The national budget introduces tax cuts, which may bring indirect benefits to the industry. However, persistent economic downward pressure and high inflation continue to drag down market expectations.
